Distribution of Risk of Harm in Delictual Responsibility From the Standpoint of Economic Analysis of Law

Abstract

Damage to property and (or) non-property rights of persons occurs quite often. The right to compensation for such damage is indisputable. However, civil doctrine ambiguously addresses the issue of risk sharing in tort obligations. Therefore, the purpose of this paper is to discuss approaches to the distribution of risk of harm in delictual responsibility and to determine their effectiveness from an economic and legal standpoint. The paper, based on economic and systematic analysis using dialectical, comparative, logical-dogmatic and other methods, including economics, describes the approaches to determining the purpose of tort law and its ability to ensure effective distribution of risk of harm. It has been proven that tort law can have direct regulatory consequences by restraining behaviour and sharing risks. It is concluded that the task of tort law is the optimal distribution of risk of harm between the perpetrator and the victim and to ensure the implementation of risky activities only if its social value justifies the risk. Based on the economic analysis of tort law, it has been substantiated that the distribution of the risk of damage in tort liability is carried out through the institutions of insurance and liability. Insurance is cost-effective when it comes to compensation for damage. However, only liability, in addition to the function of compensation, can also perform the function of preliminary prevention of harm. Therefore, the risk of causing harm in tort liability is mainly borne by the person who caused the damage. In obligations to compensate for damage caused by a source of increased danger, a person who on the appropriate legal basis (property rights, other property rights, contracts, leases, etc.) owns a vehicle, mechanism, other object, the use, storage or maintenance of which creates an increased danger, bears such risk even in the absence of guilt in causing harm. The grounds for imposing such risk on the victim are his intention or force majeure. It is this approach to the distribution of harm risk in tort liability that is fair and cost-effective and contributes to public well-being